A draft cap on how much Australians can donate to political candidates is set to be increased, as is the threshold to declare the cash.
Labor and the Liberals are on the precipice of an agreement on electoral donation reform after Special Minister of State Don Farrell released draft legislation at the end of 2024.
Sticking points for the Liberals were increasing a $20,000 donation cap for individuals and a $1000 threshold, above which donations would have to be disclosed.
It's understood Labor has agreed to raise both to around $40,000 and $5000 respectively in line with what the Liberals were pushing for as Senator Farrell works to clinch a deal ahead of a slated debate in the Senate on Thursday.
The government maintains it's open to passing the legislation with either the support of the opposition or using the Senate crossbench if the coalition pulls out of a deal.
But the Greens and independent senators whose votes are needed if the opposition refuses to support the bill have shut the door on any deals, labelling major parts of the deal "a stitch-up" aimed at entrenching a two-party system.
Some independents have privately pushed for increased donations and spending caps, AAP understands, while billionaire Clive Palmer has come out against any caps, arguing it goes against freedom of political communication rights.
Mr Palmer bankrolled his United Australia Party to the tune of $120 million at the 2022 federal election only to secure a single senator in Victoria.
Parts of the bill like a political party being able to spend up to the $90 million advertising cap nationwide but a party that includes the candidate's name - like David Pocock - are subject to individual state cap for Senate candidates.
An $800,000 candidate spending cap for each electorate will also be imposed on candidates under the proposed changes.
Senators face a cap of $200,000 per electorate in the state.
Senator Pocock was briefed by the department on the legislation on Thursday and told his party would be captured by a section that ruled out the $90 million cap.
The relevant section states a party that expressly mentioned the name of a candidate or an image or likeness is stuck with the state or territory spending cap, which is $600,000 for the ACT.
With 80 per cent of people voting above the line - and a political party needed to put an independent's name above the line on the ballot paper - this stacked the odds against grassroots movements, Senator Pocock said.
"If you're not up there, you're no chance," he told AAP.
"This means it won't be a level playing field."
Parties would spend very little in safe seats and could reallocate cash to broader advertising in competitive areas, meaning they would be able to throw more resources at certain electorates than an independent would, he said.
"Minor parties, independents would be disadvantaged, and even parties who have their name in their party name aren't able to spend more like the major parties spend."
Liberal senator Jane Hume, who is in negotiations with Senator Farrell, refused to comment on whether the spending caps were fair, saying negotiations were ongoing.
"There are implications for political parties and there are implications for the entire electoral process - we'll continue those conversations in good faith," she told reporters in Canberra.
